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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 50138
Experience:  Qualified Solicitor
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Is it compulsory for an employer to deduct a certain amount

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Is it compulsory for an employer to deduct a certain amount from an employees wages for a tied cottage, where a contract states that the employee must live in the accomdation provided?

Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today.

Is it possible to see a copy of the contract please?

Customer: replied 1 year ago.
I'am on a salary of £10920 per year, and I am required to occupy as licensee only ( as a condition of my employment for the proper performance of my duties) the residential accommodation as stated. There is no mention of any deductions from my salary of £37-45p p/w for the accomdation.

OK thank you, ***** ***** it with me. I am in court today so will prepare my advice during the day and get back to you at the earliest opportunity. There is no need to wait here as you will receive an email when I have responded. Thank you.

Many thanks for your patience. It is not compulsory for the employer to make such deductions in a sense that they can decide or agree with you to allow you to live in the accommodation rent-free. However, at the same time they could certainly consider charging you rent for the fact you are living in tied accommodation, even if this is a requirement for the successful completion of your duties. In any event, this must be agreed with you in advance and you must be aware of what deductions will be made from your pay. So when you started the job they should have given you the required information about what charges you would be expected to pay an allowed you to make a decision as to whether you are going to take the job based on these additional expenses. If they never advised you of what charges will be levied in relation to this accommodation and they never agreed with you that they will make such deductions from your pay, doing so can amount to an unlawful deduction of wages.

This is your basic legal position. I have more detailed advice for you in terms of the rights you have to challenge this, which I wish to discuss so please take a second to leave a positive rating for the service so far (by selecting 3, 4 or 5 stars) and I can continue with that and answer any further questions you may have. Don’t worry, there is no extra cost and leaving a rating will not close the question and we can continue this discussion. Thank you

Ben Jones and other Law Specialists are ready to help you

Thank you. As mentioned, this potentially amounts to an unlawful deduction from wages, which is made illegal under the Employment Rights Act 1996.

Under law, an employer can only make deductions from, or withhold an employee’s wages in the following circumstances:
• If it is legally allowed (e.g. to deduct tax);
• If it is to recover an earlier overpayment of wages made by the employer;
• If their contract specifically allows for the deductions to be made; or
• If the employee has given their explicit written agreement for the deductions to be made.

If none of the above exemptions apply, the deductions will most likely be unlawful. In order to try and resolve this, the employer should be contacted in writing, advised that this is being treated as unlawful deduction of wages and ask them to pay back the money within 7 days. Advise them that if they fail to pay the money that is owed, legal proceedings could follow.

If the employer does not return the money as requested, the following options are available:
1. Employment Tribunal - the time limit to claim is only 3 months from the date the deductions were made. To make the claim, form ET1 needs to be completed and submitted - you can find it here:
2. County Court – this is an alternative way to claim and the advantage is that the time limit is a much longer 6 years and is usually used if you are out of time to claim in the Tribunal. The claim can be made online by going to:

Hopefully by warning the employer you are aware of your rights and are not going to hesitate taking further action they will be prompted to reconsider their position and work towards resolving this.